The Top Easy Access Savings Discussion Area

TiVo_Lad

2010 said:

Their rivals are the likes of Coventry,YBS, Skipton and other building societies who do compete for customer`s savings.
If they want to be and act like a full service bank, then they should float on the stock market and give their long suffering members free shares.

Their competitor Building Societies are significantly smaller. Coventry, the second largest in the UK, has approximately one-fifth the assets of the Nationwide (who have more assets than every other building society in the UK combined), so has nowhere near the financial muscle that the Nationwide has. They need customer deposits because their cost to borrow commercial money is higher than the Nationwide. It's a simple fact.

That said, the Nationwide are not and do not act like a full service bank. They primarily focus on residential mortgages and leverage their mortgage book to borrow commercial money at low rates.

The Nationwide aren't forced to offer market-leading savings rates, there are plenty of others out there that do and you should be supporting them with your deposits. The Nationwide doesn't want your money; they have more than enough.

Rollinghome

TiVo_Lad said:

Rollinghome said:

2010 said:

TwiceNightly said:

Anyone heard what Nationwide's new rates might be on 1st April yet?

Whatever they change to they`ll be well below everyone else.
I don`t have any savings with them anymore because their rates are so bad.

They're a full service bank so in fairness shouldn't be compared to the various challenger banks that don't offer the same facilities.  Their competition are the likes of Lloyds Group, RBS and HSBC but unlike them currently don't have any ongoing eye-catching savings accounts for long-term customers, only the 5% on £1500 for 12 months for new FlexDirect customers.

They may be missing a trick.

Strictly speaking they're a Building Society, not a bank, but they do indeed rank in the Top 10 Financial Institutions in the UK (alongside Coventry Building Society too). Simply put, they don't need our deposits. With total assets of over a quarter of a trillion pounds, they can borrow commercial money in the markets way cheaper than they can from members. Their vast size means they stopped operating for "all members" a long time ago. They're a mortgage lender and they fund their mortgages through the money markets. Don't bother holding your breath for anything from them on the savings side; they don't need or probably want us.

They're a bank in the sense that they offer a full banking service, which isn't typical of a BS.  While some of what you say is correct, it also applies to comparable large banking operations, but Chase, HSBC, Lloyds Group, RBS and others do offer rates on some savings accounts to attract retail customers, if only on "regular savers" or with other restrictions and limitations

Base rate at 4.25% with interbank rates only slightly lower means they are able to do so, and it makes sense for them to have multiple funding sources. A visible retail presence has advantages for them despite the high costs.

So I wouldn't totally assume they don't want you any more, either now or in the future, and Nationwide have so far shown themselves determined to remain a BS without the burden of shareholders.

TiVo_Lad

Rollinghome said:

They're a bank in the sense that they offer a full banking service, which isn't typical of a BS.  While some of what you say is correct, it also applies to comparable large banking operations, but Chase, HSBC, Lloyds Group, RBS and others do offer rates on some savings accounts to attract retail customers, if only on "regular savers" or with other restrictions and limitations

Base rate at 4.25% with interbank rates only slightly lower means they are able to do so, and it makes sense for them to have multiple funding sources. A visible retail presence has advantages for them despite the high costs. So I wouldn't totally assume they don't want you any more, either now or in the future.

Nationwide offer a full consumer Current Account service. They do not offer a full banking service which includes full commercial banking and other financial services

The "high street" banks do offer some decent rates, but only to attract customers in to cross-sell their other products. Nationwide don't have that broad range of products to cross sell because they focus on residential mortgages so there's no benefit to them unless you're looking for a mortgage.

Rollinghome

TiVo_Lad said:

Rollinghome said:

They're a bank in the sense that they offer a full banking service, which isn't typical of a BS.  While some of what you say is correct, it also applies to comparable large banking operations, but Chase, HSBC, Lloyds Group, RBS and others do offer rates on some savings accounts to attract retail customers, if only on "regular savers" or with other restrictions and limitations

Base rate at 4.25% with interbank rates only slightly lower means they are able to do so, and it makes sense for them to have multiple funding sources. A visible retail presence has advantages for them despite the high costs. So I wouldn't totally assume they don't want you any more, either now or in the future.

Nationwide offer a full consumer Current Account service. They do not offer a full banking service which includes full commercial banking and other financial services

The "high street" banks do offer some decent rates, but only to attract customers in to cross-sell their other products. Nationwide don't have that broad range of products to cross sell because they focus on residential mortgages so there's no benefit to them unless you're looking for a mortgage.

OK, so let's just call it a full Consumer Current Account, and Savings, and Mortgage, and Whatever Else They Offer, service.  Feel free to pick the nits out of that.

patgarrett

patpalloon said:

I have a bit of an aversion to Chip. I haven't tried it yet, I don't know what it is, maybe the fact that Chip themselves aren't FCSC protected - I know the bank where your money is held is though.

Can someone please explain to me how Chip makes money when they're not the holding institution? 

allegro120

TiVo_Lad said:

 Don't bother holding your breath for anything from them on the savings side; they don't need or probably want us.

I've got 5% RS account with them, only £50 p/m, but every little helps   Nationwide used to have decent offers in the past. When I opened my current account with them they paid 5% on £2500 for a year and later they offered 5% RS on £500 p/m for 5 consecutive years.  Their credit card cash back offer was also handy.

Rollinghome

2010 said:

Rollinghome said:

2010 said:

TwiceNightly said:

Anyone heard what Nationwide's new rates might be on 1st April yet?

Whatever they change to they`ll be well below everyone else.
I don`t have any savings with them anymore because their rates are so bad.

They're a full service bank so in fairness shouldn't be compared to the various challenger banks that don't offer the same facilities.  Their competition are the likes of Lloyds Group, RBS and HSBC but unlike them currently don't have any ongoing eye-catching savings accounts for long-term customers, only the 5% on £1500 for 12 months for new FlexDirect customers.

They may be missing a trick.

Wrong.
They are a building society who have no shareholders to pay. (as they like to tell everyone at every opportunity)
Their rivals are the likes of Coventry,YBS, Skipton and other building societies who do compete for customer`s savings.
If they want to be and act like a full service bank, then they should float on the stock market and give their long suffering members free shares.

Apologies, very off-topic.

How much of your money is with them, or is your mortgage?  If very little, then I assume you feel no entitlement to free shares? The "free" shares some societies once offered were just a bribe for votes, not altruism. Most of them now gone and forgotten.

Mutuals like building societies, friendly societies, credit unions etc are considered to have a substantial social responsibility as well as providing financial services. You aren't required to use them. I don't have money with Nationwide, though do use their ATMs, but I wouldn't want to deprive others of their choice, and certainly not just to pocket a few shares at their expense.

The difference is obvious when you look at any high street. In my local high street, there was a Nationwide, RBS, HSBC, Lloyds, Halifax, Santander, and an estate agent who was an agent for a small building society. Over the last two years, all have closed, apart from Nationwide and RBS.  RBS with limited hours for just five days a week, Nationwide still open for normal hours, six days a week.

In other high streets nearby, Nationwide is now the sole remaining bank.

The likely reason Nationwide can't offer the top savings rates is due to the high cost of keeping those branches open and staffed. Higher rates for savers need higher rates for borrowers.  I'm fine with using branchless online banks, but others aren't.

It's a choice, and I'm in favour of choice.

Band7

patgarrett said:

patpalloon said:

I have a bit of an aversion to Chip. I haven't tried it yet, I don't know what it is, maybe the fact that Chip themselves aren't FCSC protected - I know the bank where your money is held is though.

Can someone please explain to me how Chip makes money when they're not the holding institution? 

I don't much care as they are FCA authorised and my deposits with them are FSCS protected but they will make money from their investment platform, and from subscriptions.

You can check Companies House for their accounts. No idea whether they are profitable or still in the investment phase but as I said, I don't much care. It's a bit like with a car - -  I have no idea how it's built and how it works but I am happily driving it because it's a known make and I have an MOT.

Beddie

patgarrett said:

patpalloon said:

I have a bit of an aversion to Chip. I haven't tried it yet, I don't know what it is, maybe the fact that Chip themselves aren't FCSC protected - I know the bank where your money is held is though.

Can someone please explain to me how Chip makes money when they're not the holding institution? 

They are probably getting a small margin from the holding bank, so they might be paying 3.4% and getting 3.7%. 

allegro120

Beddie said:

patgarrett said:

patpalloon said:

I have a bit of an aversion to Chip. I haven't tried it yet, I don't know what it is, maybe the fact that Chip themselves aren't FCSC protected - I know the bank where your money is held is though.

Can someone please explain to me how Chip makes money when they're not the holding institution? 

They are probably getting a small margin from the holding bank, so they might be paying 3.4% and getting 3.7%. 

3.4% savings account is only a part of services they offer, most of their offerings have fees attached.